Only typed answer Three alternatives are considered for project execution by a construction firm. The following cashflow table is produced:Cash FlowInvestment first cost in $Net annual receipts less expenses ($)Useful life (years)Interest rate (%)O AOCAlternative A390,00069,0001010BAlternative B920,000167,0001010Which alternative should be selected for best return using the annual equivalent amount method?Annual equivalent amount method cannot help to select one of the alternatives.Alternative C660,000133,5001010

Given, Three alternatives : Alternative A, Alternative B and Alternative C The Cashflow is given as…

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Three alternatives are considered for project execution by a construction firm. The following cash flow table is produced:

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

Only typed answer

Three alternatives are considered for project execution by a construction firm. The following cash
flow table is produced:
Cash Flow
Investment first cost in $
Net annual receipts less expenses ($)
Useful life (years)
Interest rate (%)
O A
OC
Alternative A
390,000
69,000
10
10
B
Alternative B
920,000
167,000
10
10
Which alternative should be selected for best return using the annual equivalent amount method?
Annual equivalent amount method cannot help to select one of the alternatives.
Alternative C
660,000
133,500
10
10

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